Just when things began to look up for Lastminute.com a rival has come along bearing a similar name and an even more familiar business plan.

US Internet firm LastMinuteTravel.com is gearing up for a UK launch which will put it into direct competition with its near namesake.

The Atlanta-based company, formed in 1997, has links with more than 600 travel and leisure firms including the Bass, Hilton and Sheraton hotel chains as well as 25 airlines.

Both firms look to sell excess inventory - everything from holidays to theatre tickets - over the Internet. Both argue this means cheaper prices for consumers. Both say they have global expansion ambitions. The companies' websites have similarities as well.

However, the US company also offers a personalised service - something the UK firm is looking to introduce. Registered users are sent an e-mail when requested deals become available. LastMinuteTravel.com's UK subsidiary is expected to be up and running by the end of July.

The threat of competition is likely to alarm Lastminute's investors who have seen the company's value cut in half since it floated last month. The business is now worth around £225 million. However, last week the company's share price started to rise following positive comments from analysts. Both Morgan Stanley Dean Witter, who oversaw the company's float, and Donaldson Lufkin & Jenrette have issued buy ratings for the stock in the last couple of weeks.

News of LastMinuteTravel.com's entrance into the UK market comes as another online seller, the First Resort (which is 30 per cent owned by tour operator Thomson Travel Group) looks to put 13 million package holidays - around 90 per cent of the UK annual total - on the Internet.

The First Resort pledges to sell holidays at below the prices listed in travel agents' brochures.

The UK firm argues that because it has first mover advantage it has six months head start on its rivals. Since its launch in October 1998 the company has built up a customer base of more than 1 million users, around 5 per cent of whom have bought something from the firm.

The flotation of Last minute.com, which reports its first set of interim results later this week, made paper millionaires of its founders, Brent Hoberman and Martha Lane Fox.